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Goldman Sachs lifts S&P 500 target on vaccine hopes, Biden win

FILE PHOTO: A sign is displayed in the reception of Goldman Sachs in Sydney, Australia, May 18, 2016. REUTERS/David Gray

LONDON (Reuters) - Goldman Sachs lifted its 2020 S&P 500 .SPX target to 3,700 points on Wednesday after a much-awaited positive vaccine announcement and Joe Biden's U.S. election win triggered a rally in global stock markets.

“Despite investor focus on the prospective policy implications of the Biden presidency, the vaccine for COVID-19 is a more important determinant of the path of both the economy and stock market in 2021,” the U.S. investment bank wrote in a note to clients.

It sees the S&P 500 hitting 4,300 at year-end 2021, a 21% jump from Tuesday’s closing levels.

In Europe, Goldman expects a strong bounce in profits in 2021 as lockdowns ease and populations start to be vaccinated. It raised its 12-month target for the STOXX 600 .STOXX to 430 points, an 11% jump from current levels.

Value stocks, typically companies that are more sensitive to economic cycles, have been soaring since Pfizer’s announcement on Monday of positive data from its vaccine trial, raising hopes of an economic recovery.

Goldman also raised its 12-month target for London's top FTSE 100 .FTSE share index, which like other European benchmarks is heavy in value stocks, to 7,200 points, a 13% upside from current levels.

“We see the improved macro and commodities environment as supportive going forward,” it said, adding that value sectors represent more than a third of the FTSE 100 index.

JPMorgan said on Monday that it expected the S&P 500 to hit 4,000 points by early 2021.

Reporting by Thyagaraju Adinarayan and Danilo Masoni; Editing by Tommy Wilkes and Elaine Hardcastle

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